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1. A company purchases a new machine for $5,000 for a 5-year project, with no salvage value. The company is using the DDB to SL

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1. A company purchases a new machine for $5,000 for a 5-year project, with no salvage value. The company is using the DDB to SL method to determine depreciation (DDB multiplier = 200% = 2.0). a. Calculate the depreciation amounts Dn.dds and book values B, for each year using the DDB method only. Show the calculations for year 1 (the rest can be done directly on a calculator). b. Calculate what the depreciation amounts DSL would be for each year if the straight-light method was used starting from the previous year's book value. Show the calculation for year 1. c. Which year should the company switch to the straight-line method to maximize depreciation? n D1,DDB Dn.SL B $5,000 0 - 1 2 on 4 5

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